Powerful tax strategies cut or eliminate taxes to drive family wealth.

Powerful tax strategies cut or eliminate taxes to drive family wealth.

Using proprietary tax law research, we create innovative solutions that dramatically reduce or completely eliminate capital gains, estate, income, and other taxes. We named ourselves TaxMaster™ for a reason – we possess uncommon tax wisdom that can supercharge your wealth. Turning avoidable taxes into family wealth offers the greatest return on investment we know of, often many, many times the cost of the research and advice. Let us show you how to kick your net worth into overdrive.

OUR PASSION IS TO GROW YOUR FAMILY WEALTH BY LEGITIMATELY CUTTING YOUR TAXES “TAX SAVED IS WEALTH EARNED!”

ACCOUNTING & TAX

Do you have a sinking feeling you’re paying too much in tax? You’re not alone. According to David Ramsey, “Every year, more than 2 million taxpayers overpay their income taxes—and we’re not talking about pocket change”. Forbes says 93% of business owners overpay their taxes – even those with high dollar CPAs. Most tax advisors just don’t know or care about all the opportunities in the 70,000 page tax rules, and their clients can pay dearly because of it. What could that mean to you and your family? For business owners, it means there’s a 93% chance you are bleeding needless family wealth by paying way too much tax. Even the Federal Government acknowledges business owners overpay by $50B each year! A CPA and tax lawyer writing for Kiplinger’s attributes this to CPA ignorance, laziness, and poor tax planning. If you’re an investor or own a business, it’s virtually certain you are wasting wealth because of poor tax advice, but probably don’t even know it.

Are you overpaying and just don’t know it? On virtually every tax return we’ve examined for new clients, we’ve found dropped balls. Time after time, we see the old tax preparer had big opportunities to save tax that were completely missed. Could this be happening to you? Click here to find out about how our FREE CPA assessment could reveal the secrets to unlocking hidden wealth for you and your family. The best tax advice can be the difference between being successful…& getting really rich – find out if you’re missing out.

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Many successful families are woefully underserved when it comes to tax reduction advice that works. If you’re successful, odds are you’re in the small percentage paying nearly 75% of all US income taxes…If you’re not using the smartest techniques, you & your family could still be leaving a huge fortune on the table….

Business owners, professionals, investors & family offices…

If you’re like many successful taxpayers, you could be overpaying by hundreds of thousands or even millions in legitimately avoidable tax each year. The Internal Revenue Code is incredibly complex, and often even expensive accountants and advisors routinely miss powerful opportunities to save big tax. But, this complexity can offer huge payoffs for those with the right information & advice. If you’re like most of the folks we talk to, you could be leaving a real fortune on the table and never even know it.

Is ineffective tax strategy bleeding your legacy?

Smart tax planning is the easiest way to grow income and wealth. The difference in compound wealth growth without the drag of excessive taxation can be extraordinary. How much richer would your family get if some or most of what you pay each year in taxes went to investments instead? How much better could you live? Too often, tax advisors – even expensive and high-profile ones – are blind to these opportunities, and their clients are needlessly subjected to massive, avoidable taxes that throttle their wealth and wilt their legacies.

Could you unknowingly be leaving millions of family wealth on the tax table?

We have saved successful families literally tens of millions in avoidable taxation, using mainstream, accepted, time-honored techniques. Such techniques are well-known at the “best practices” level, but often completely unknown to tax advisors of even extremely wealthy families. Chances are high you could be missing significant tax-savings opportunities as well. If you suspect you may be paying more than your legal share, click here for a FREE initial evaluation by confidential telephone call. We’ll be able to quickly determine potential opportunities, and the right strategy to explore them.

Will rising taxes choke your retirement & bleed your legacy for your children & grandchildren?

The Tax World is Changing – Fast!

Families of certain means may soon face the highest estate tax rates in a generation. Under existing law, the estate tax free level gets cut in half in just a couple of years. This alone will visit additional millions in tax hikes on substantial families. Proposed legislation calls for even bigger increases. Combined changes to gift, estate, capital gains, and income tax policies could result in over half – and very likely much more than half – of your wealth lost to various taxes.

One half or more of your wealth may be forever lost to taxes. While charitable and philanthropic planning is one way to control tax, this means less – sometimes lots less – going to your children, grandchildren, and other family.

Know your options.

Regardless of your feelings on social and tax policy, you should understand the landscape and come up to speed on all your options so you can make the best choices for your family values and preferred legacy.

It’s not too late – but the clock is ticking fast! Do you worry if estate and other tax hikes could diminish, or even erase, the family legacy your family’s worked so hard to build? If your net worth has more than a few zeros after it, existing law still permits very powerful planning strategies. Delays of even a few months could make them forever lost to you.

From stock market and real estate investors, to business owners and professionals, we’ve innovated master tax strategies. These routinely convert hundreds of thousands of dollars – and often millions of dollars – of avoidable taxes into hard cash in your pocket. Taking a business owner from a million a year in income tax to a hundred thousand or less is typical. We do it all the time. Finding ways to cut or eliminate capital gains tax is also typical for us. From stock investors to real estate investors deep in the depreciate recapture hole, we have solutions. And not just to defer taxes like with 1031 exchanges, only to pay a higher rate later. We’ve found solutions to eliminate them. Selling a business or looking to monetize bonus stock or options? Smart tax can nearly double the wealth you take off the table.

Just think for a minute. How much richer you’d become – how much better you and yours would live – if a big chuck of what you pay in taxes stayed in your pocket instead?

Just think for a minute. How much richer you’d become – how much better you and yours would live – if a big chuck of what you pay in taxes stayed in your pocket instead?

Where would you take your family? How would you invest the cash flow? How much sooner, how much better, would you retire? At last, you have an opportunity to learn how to turn this toxic cash sewer of taxes into a major asset and income booster. And start supercharging your wealth and income with virtually no effort on your part. And it will change your life.

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From one of Jeff’s Forbes articles: So what’s that to you, my still-merry 1%-ish men (and bonnie maids?) It may be time to batten down the hatches afore your wealth sub is flooded and its hull plunges to the “till there ain’t no rich no more” bottom of universal impoverishment. Regardless of which way your political tail wags, you may want to steel yourself against some of the transformative tax changes lately running up the flagpole. Here are some of the soak-the-rich ideas floating around lately, and a few derivatives likely to pop up as POTUS fever takes the land:

1.

Millionaire Taxes. This magnanimous notion would subject those above a subjective wealth bar – $5M in income has been recently bandied about in NY – to extra taxes. It is noteworthy that the last time NY did this – the current “millionaires’ tax” – the bar was lowered to some $300K in forming existing law. Current proposals in NY include a special additional property tax on second “luxury” residences, as well as an additional closing “fee” on real estate transactions over $3M. The stated use is for the subway (yeah, right, and we promise to remove the toll booths once the bridge is paid for!; note the hourly rate for NYC subway borers is some $120 (which surpasses even Germany’s) though they still can’t seem to get the darn thing done.

2.

Property Taxes Kissin’ cousin to NY’s millionaire taxes these, as most landowners know, are nearly unavoidable, and inescapable for the reason you can’t flee to a lower tax jurisdiction, at least not with your real estate. Worse, Mother State has a perpetual, first claim lien on the dirt, and is quite wont to foreclose and redistribute for unpaid taxes. They kinda got you by the short hairs here, and it’s easy to see how such a tax could quickly get soak-the-rich progressive whilst sparing the dear voting class. Benefits-rich, deficit-doomed states like Alaska are prime candidates for such a shift, and it looks like NY is already halfway there. Of course, the net economic effect of increasing expenses without offsetting benefits would be to suppress values, wasting wealth sunk in real estate that might never return.

3.

Stealth Corporate Taxes designed to chill stock buy backs which generally are used to juice stockholder returns similar to dividend payments. Sanders opined in the NY Times that buybacks unfairly enrich shareholders – the owners of the companies! – at the expense of the proletariat. Proposed legislation would prohibit buybacks, and possibly dividend payments, unless all workers are paid at least $15/hour regardless of the job or the labor market valuation of it. Beyond this stealth minimum wage boost, such policy would divert erstwhile owners’ profits to the workers’ paradise of higher wages, expanded company-paid training, and richer benefits. Such an expansion of the stakeholder model at the expense of shareholders seems likely to divert capital to less productive and accountable ends, and would certainly shave stock values to levels commensurate with the truncated returns. This de facto bump in labor costs will surely serve to make American companies great again and crush the global competition!

4.

Income Taxes The old chestnut of raising marginal rates – I have 70% from AOC, who’ll give me 80%? Can I get 90% from Bernie? How about you, Ms. Warren? – has become way popular again, and the drumbeat will no doubt intensify. While income taxes – unlike the rest of the social reengineering concepts enumerated here – are generally malleable and controllable by those blessed by erudite tax advice, many smart and successful taxpayers are not so blessed and stand to get whacked badly. The Trumpian tax reform could easily be upended by a shift in the political ground, and tax rates approaching 100% are not unprecedented in US history, peaking at 94% last century.

5.

Higher Payroll Taxes to “save” Social Security and expand benefits to recipients beyond Uncle Sam’s current $1,000,000,000,000 (that’s a big $1T) annual nut. This salvation would be paid for by hiking the current FICA tax from about 12% to almost 15% – a 25% rise! – and subjecting those earning over $400K to the full FICA tax, instead of the present $133K cutoff for the Social Security part (by far the biggest piece). A supremely progressive proposal, taxes would also be cut for those below a certain means, large in number, voting power, and aggregate taxes paid, but low in fat cat income.

6.

Estate Tax “reform.” It was not so long ago that the estate tax began for many families at the $600K mark, including life insurance proceeds. While the current threshold is a lofty $22M or so (back to $11M in 2026) this could change in a heartbeat. Mr. Sanders has already proposed dropping this to some $3.5M, and he probably isn’t done. He’s also proposed raising the top estate tax rate to 77% from the current 40%. This author believes sharply higher estate tax exposure for many f not most readers to be extremely likely in the years to come, and that proactive tax control measures should be taken. Also suggested by several has been the elimination of the step up in basis, under which capital gains taxes were essentially waived at death. With the step up gone, affected families would face the double whammy of both estate and capital gains taxes. Gee, could they add up to more than 100%? And that’s before considering the possibility that capital gains favorable rates – already chipped away at in recent years – might be curtailed or eliminated entirely.

7.

Wealth Taxes Finally, we come to the pure form of Ms. Warren’s proposed wealth tax, which would be kind of like an annual estate tax levied on the entirety of an affected family’s assets, from stocks to real estate to business to livestock. Since only the dastardly rich are targets, you’d have to have a lot of cattle to get in this game, which seems only fair given the volume of milking hoped to be at hand. A good way to visualize the concept is to contrast a sales tax (one time) with a personal property tax (like buying the same car every year) or real estate taxes. Such a tax would be a real compliance bear given the complexities of annual valuations in complicated, squishy things like businesses. On top of enormous tax prep costs, such a tax could be a real rich-soaker, for sure.

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While for now, anyway, most strains of wealth tax proposals only target the mega-rich, it wouldn’t take much of a political nudge to expand that to soak the entire 1%, which would still leave 99% of the electorate to rally around a “you deserve it!” campaign trail cry. Shoot, you could soak the top 10% and still have plenty of electoral hay left.

Nothing is so constant in tax policy as change. While many or most of the changes discussed here may not come to pass, one never knows, and the wise would be carefully ready with plans B. Tax policy is a political football, the right vs. left game is on with a vehemence perhaps not seen since the old New Deal was young, and, if nothing else, we are blessed to be living in truly exciting times.

Consider this. If you could raise your income by 20%, 30%, even 50%, what would that mean to you? How much faster would you get richer investing that cash flow? How much better would you and your family be able to live at the same time? So, ask yourself, do families like the Buffets, the Tesla-Musks, and the Amazon-Bezos have access to better tax advice than you do? You bet they do.

Here’s what it means. Let’s take a look at a real America family business success story – Amazon. Jeff Bezos and his then-wife MacKenzie started Amazon from scratch as a family business. In a recent tax year, Amazon made 11.2 billion. Amazon’s tax bill? $0. In fact, it got a tax refund of $129 million. That means it’s paying a negative income tax rate. Some call this corporate welfare. Bernie Sanders jabs that Amazon

Prime members paid more for their subscriptions than the company paid in federal taxes, and he’s right. But we don’t call it welfare. We call it smart tax advice.

Do you think your family has access to the tax advice that families like the Bezos do? How about the Trumps, Clintons, Bushes and Obamas? Nope. Is that kind of advice rare, and hard to find? You know it is. But is it Possible to find? Of course not. You’re getting some right now. And you’re about to get lots more that will change your fortune, and your life! So, stay with me. Connect with us, and let us share some little-known secrets that may literally change your life!

Our PASSION is to grow your family wealth by legitimately cutting your taxes “tax saved is wealth earned!”

Do you have a sinking feeling you’re paying too much in tax? You’re not alone.. According to David Ramsey, “Every year, more than 2 million taxpayers overpay their income taxes—and we’re not talking about pocket change. ”Forbes says 93% of business owners overpay their taxes – even those with high dollar CPAs. Most tax advisors just don’t know or care about all the opportunities in the 70,000+ page tax rules, and their clients can pay dearly because of it. What could that mean to you and your family? For business owners, it means there’s a 93% chance you are bleeding needless family wealth by paying way too much tax. Even the Federal Government acknowledged business owners overpay by $50B each year! A CPA and tax lawyer writing for Kiplinger’s attributes this to CPA ignorance, laziness, and poor tax planning. If you’re an investor, high-income executive, or own a business, it’s virtually certain you are wasting wealth because of poor tax advice, but probably don’t even know it.

Are you overpaying and just don’t know it? Tax saving is often a number one priority for investors, professionals and business people. On virtually every tax return we’ve examined for new clients, we’ve found dropped balls. Are you getting the right QBI deduction? Do you get a blank stare when you ask what is a QBI deduction – one of the biggest tax shelters for business to come around in decades?

What does it mean to be audited? The word audit strikes fear into the hearts of many taxpayers. Are you needlessly exposed to an IRS audit? How far back can the IRS audit you? How far back can the IRS go? Typically three years, but sometimes much longer. If you DIY, do you have a sound Turbotax audit defense? But what does being audited mean, really? What happens when you get audited? How does the IRS notify you of an audit? The process ranges from simple questions by mail, to a full-on examination of all your records by an IRS Field Agent. You don’t want to find yourself being audited by IRS and having to tell them you have no receipts! What does being audited mean? It means the IRS has reason to doubt the correctness of your tax returns and wants to dig deeper to see if they can get more money out of you. Depending on how your return was prepared, IRS audit penalties can be severe. There is no magic wand IRS audit phone number. Getting someone on the phone is a challenge, and even if you do the IRS is not your friend. How many years back can IRS audit? The typical statue of limitations is three years, but there is no limit if IRS suspects fraud. So how long can the IRS audit you, or how far back does IRS audit depends on your facts. What happens if you get audited and what happens when the IRS audits you? IRS will want detailed information to see if you can verify the positions you or your preparer have taken on your returns, and if the law was correctly applied – if not, you will be looking at additional taxes, interest, penalties, and in some cases criminal prosecution.

Are You a Victim of Common Tax Blunders? Time after time, we see the old tax preparer had big opportunities to save tax that were completely missed. Do you think you are getting full value on your rental property tax deductions, when they are actually wasted to passive activity losses because your CPA forgot to check the right box on Schedule E? Are you paying excessive tax on rental income? Often the tax benefits of rental property are completely wasted by ineffective tax advisors. Getting straight answers on simple questions like is rental property tax or even is rent tax deductible can be a challenge. Can you avoid rental property depreciation recapture? Many “experts” will say no, but there are many effective techniques, from simple deferral to complete elimination – and ways to avoid capital gains taxes to boot! You just need to study and know and effectively apply the law. Rental property deductions need not be lost or watered down. If you ask “how much tax do I pay on rental income?” the answer need not be “lots” – it can even be zero! Done right, rentals can even result in tax free retirement income… and with the right structure, even be complete free of estate taxes, too!

Tax Magic Strategies Smart tax can be the difference between just being comfortable, and getting really, really rich. But how to save tax? What’s the magic recipe? It’s not enough to just Goggle tax pros near me to get the best tax saving strategies. Sadly, most CPAs and tax preparers just don’t seem to make the commitment to deep study of the constantly changing and complex tax laws to make a big impact. Too many have a “you have to pay your taxes” mentality and don’t even look for smart ways to cut taxes bigtime. So ask yourself: is your CPA missing critical deductions and even basic strategies? Could they not be tax expert you think they are? You would probably be shocked to learn that only about 15% of CPA board exam tests tax – the rest is accounting, not tax! That means something like 85% of CPA knowledge is not tax related. At TaxMaster, we offer PhD-grade tax expertise with proven results. If you really want to learn how to save money on taxes and find valuable tax reduction strategies, you need to find true masters – and they are very, very rare!

Could this be happening to you? Click here to find out about how our FREE assessment could reveal the secrets to unlocking hidden wealth for you and your family. The best tax advice can be the difference between being successful…& getting really rich – find out if you’re missing out.

Many successful families are woefully underserved when it comes to tax reduction advice that works. If you’re successful, odds are you’re in the small percentage paying nearly 75% of all US income taxes…If you’re not using the smartest techniques, you & your family could be leaving a huge fortune on the table…This has been true for decades. In the tax storm wealthy families may be facing in the years ahead, the tax costs may wipe out your grandchildren’s’ inheritance.

If you wonder how far back the IRS can audit, you may not be as secure as you hope.

Business owners, professionals, investors & family offices…

If you’re like many successful taxpayers, you could overpaying by hundreds of thousands or even millions in legitimately avoidable tax each year. The Internal Revenue Code is incredibly complex, and often even expensive accountants and advisors routinely miss powerful opportunities to save big tax. But this complexity can offer huge payoffs for those with the right information & advice. If you’re like most of the folks we talk to, you could be leaving a real fortune on the table and never even know it.

Is ineffective tax strategy bleeding your legacy?

Smart tax planning is the easiest way to grow income and wealth. The difference in compound wealth growth without the drag of excessive taxation can be extraordinary. How much richer would your family get if some or most of what you pay each year in taxes went to investments instead? How much better could you live? Too often, tax advisors – even expensive and high profile ones – are blind to these opportunities, and their clients are needlessly subjected to massive, avoidable taxes that throttle their wealth and wilt their legacies.

Could you unknowingly be leaving millions of family wealth on the tax table?

We have saved successful families literally tens of millions in avoidable taxation, using mainstream, accepted, time-honored techniques. Such techniques are well-known at the “best practices” level, but often completely unknown to tax advisors of even extremely wealthy families. Chances are high you could be missing significant tax-savings opportunities as well. If you suspect you may be paying more than your legal share, click here for a FREE initial evaluation by confidential telephone call. We’ll be able to quickly determine potential opportunities, and the right strategy to explore them.

From one of Dr. Camarda’s whitepapers:

Tax Control—the Master Ingredient to Wealth
Do you feel like your wealth’s being taxed to death? Making plenty of money but not keeping enough? High taxes can be one of the biggest obstacles preventing you from building wealth faster. With taxes, it’s not who you know but what you know (and there’s a lot to know!). There are many tax advisors, but many barely scratch the surface, and quality tax advice can be remarkably elusive. That’s no surprise since studies have shown even IRS employees only understand between 55% and 83% of basic tax facts. Many people feel that their tax advisor is not proactive or knowledgeable or strategic enough, but truly sophisticated tax advice can mean the difference between treading water and getting rich.
Tax control is truly the master wealth ingredient. It’s not what you make, but what you keep that counts, and for too many people, taxes are a hidden siphon draining wealth year after year, which prevents your kitty from really ever filling up. Those that have access to best tax practices build wealth amazingly faster than those that don’t.
The concepts you’re about to learn about in The 9 Biggest Tax Mistakes and How To Avoid Them may help you get richer faster, retire years earlier, have more to spend in retirement, and really accelerate your wealth objectives.

Tax Mistake #1—Believing the Tax Code Is Set in Stone
The Internal Revenue Code is one of the most complex, convoluted, and internally contradictory documents ever created—and it keeps changing almost by the week. Various studies conclude that even IRS employees only understand between 55% and 83% of basic tax facts. As of 2006, the Federal tax rules totaled over 13,000 pages—and the rules have grown more complex since. Many of these rules exist to try to counter the tax reduction strategies that the most proactive taxpayers (and their advisors) keep coming up with to legally keep wealth in their families’ pockets, instead of the IRS’s. But for IRS, it can be a game of catch up, with the best advisors finding new opportunities faster than IRS can close old ones. Great complexity can breed great opportunity, and it’s been said that “sophisticated taxpayers take advantage of the complexity to find loopholes that lower their tax liability.” Tax avoidance is perfectly legal, and often remarkably easy, if you know where to look.
Too many taxpayers (and their tax advisors) believe in “death and taxes” inevitably, that you “gotta pay what you gotta pay.” The truth is, it is perfectly legitimate to use the portions of the tax code that support the reasonable position that results in the least tax—or no tax at all! This is a key concept; tax liability is a function of code interpretation, and astute advisors mine the complexity of the code to build the most favorable positions for taxpayer clients.
The opportunities to legitimately save enormous dollars can be profound, if you know where to look. Unfortunately, some tax preparation professionals may not be the right place. According to a Money magazine study cited in an MIT book, not one tax prep professional was able to produce a correct return! Often, even the most basic tactics, like controlling taxable investment income, or maximizing tax deductions, are completely missed. Good tax advisors are worth their weight in gold, but can be very hard to find, especially if you don’t know how to tell the difference.
If you own a business, are a high income professional, or have significant investment accounts (whether you are retired or not), you may be leaving way too much money on the table, and this report may be worth a lot of money to you. I hope it is!

Tax Mistake #2—Missing Tax Arbitrage Opportunities
Arbitrage just means taking advantage of different prices for the same thing in different markets. If you can buy gold for $1500/oz in London and sell it for $1700 in Dubai, you can make a riskless $200/oz—that’s arbitrage.
For instance, tax arbitrage—using the differences between tax rates applicable to different kinds of entities (C vs. S corporations, for instance) or different individuals (you and your children, for instance)—can save some people a real bundle. Another way to apply this concept is doing IRA ROTH conversions (paying the tax on the IRA in exchange for the remainder to grow tax free) in years when you are in a low tax bracket because you may have business losses, lost a job, or high deductions from medical expenses, for instance. Ditto for postponing IRA distributions until after retirement when earned income (and hence your tax bracket) is lower or absent. A great example of arbitrage is the so-called corporate inversion, a super “loophole” (now closed due to rules update as explained under Mistake #1) that basically let corporations swap high U.S. tax rates for near-zero ones in places like Ireland; this was perfectly legally under the law before it was changed—and still legal for the companies that had the foresight to seize the opportunity ahead of the curve.

Tax Mistake #3—Being an Employee Instead of Self-Employed
For those of you who can make this choice, being self-employed is a no-brainer. You can deduct a lot of legitimate expenses, set up your own deductible retirement plan, and use numerous, creative, complete above-board ways to cut taxes and build your own wealth more rapidly.
Shy of starting your own company, the independent contractor route is the most feasible for the average reader. Here, your pay is shown on a 1099 instead of a W2. The pay number on the 1099 is the beginning line on the business return you will file against which expenses are deducted to arrive at taxable income (a number usually much, much lower than where you wind up as an employee, even if you try to deduct the same items as “employee business expenses”). I won’t get into the technical detail here, but, trust me, the difference can be huge, as most CPAs will probably tell you. If you do this, you can file as a sole proprietor (using the Schedule C on your regular 1040 tax return) or actually set up a corporation or LLC (LLC is preferred—see my report on asset protection), and then file the appropriate business return (usually an 1120S, but possibly 1065), which dovetails into your personal return. While filing a business return can seem a bit of a bother (but is usually fairly simple and cheap), running your independent contractor work through your own company can yield many benefits, including asset protection and a much lower audit profile.
While I appreciate that many readers can not avail themselves of 1099 status without changing jobs, if there is any possibility at all, you should explore it. There are probably significant tax and other savings to your employer as well, so it is worth exploring with your owner, manager or HR. If the nature of your work meets the various IRS tests and can qualify, the wealth opportunity is significant for all concerned (except IRS, which is why it is not a fan of 1099 work!).

Tax Mistake #4—Not Using Real Estate Investment Tax Breaks
“Tax reform”, back in 1986, killed the real estate tax breaks so soundly that most of us don’t even remember how sweet they were anymore. Many taxpayers (and their advisors) incredibly still don’t know about the “real estate professional” loophole that opened up in the early 1990s, and that’s a darn shame for those of us that have amassed a bit of a real estate portfolio, whether business property, or commercial or residential rentals. In the right fact pattern—you have a spouse who has the time to spend, say 15 hours a week ostensibly looking after the real estate (keeping books, checking ads, painting or directing the painters, whatever) and is not doing much else occupationally—you get most of the old real estate write-offs back and can net them against your other income, possibly saving a huge slug of tax. If you have real estate besides your home, are frustrated by the post-1986 “passive loss” rules, and have a willing and able spouse, you really need to get a second opinion on this (Camarda has an endless supply of them).
And make no mistake, what you have heard about real estate investing being responsible for more millionaires in the U.S. is probably true. If you are careful, patient, and willing to spend some time, it can be a very effective and tax advantaged way to build wealth and ongoing income.

Tax Mistake #5—Not Maxing out Tax-Deductible Retirement Plans
This one’s pretty simple, and you probably know it even if you don’t do it. Money you contribute to a 401k, 403b, TSP, or other deductible plan at work comes right of the top of your gross income, meaning you save the income tax, and your share of the FICA (Social Security and Medicare) and other applicable taxes. FICA runs at around 7%, so if you are in a 25% income tax bracket, you save at least 32% right now (if in the highest 39.6% bracket, you save nearly 47%!). Do if you don’t contribute $10,000, you take home maybe $6,800. If you invest instead, the whole $10,000 goes to work for you. And while you will ultimately have to pay tax on withdrawals, you will benefit because:
1. Chances are the savings discipline will make you wealthier down the road than not mending your earn-it and spend-it ways;
2. You can use tax arbitrage as explained in Mistake #2 to sharply reduce or even eliminate the tax.

Tax Mistake #65—Not Planning around the AMT
The Alternative Minimum Tax has been around since 1970 and was designed as a way to force fat cats with smart advisors to pay at least some tax instead of avoiding it via the numerous complicated loopholes that existed at the time (of course, the smart guys just found other loopholes.) These days, it mostly ensnares middle income or higher income people who don’t (or whose advisors don’t) know enough or take the time to plan around it. All admit this is very unfair, but it continues because a) the tax code is broken and there is not the political gumption to fix it, and b) the Federal government spends far more than it takes in and really needs the money.
Increasing contributions to your deductible retirement plan, making investments more efficiency, and timing large, deductible items like property taxes into favorable years are a few ways to avoid this tax. There are a lot of other smart things you can do to plan around this tax, but the technical complexity of this particular nastily not-so-little tax precludes discussion here. Get the knowledge or find a really smart tax advisor, and most of all, plan before December 31—once the New Year’s ball drops, many planning options evaporate!

Tax Mistake #6—Not Planning a Strategy!
This is without question the most fundamental mistake made by taxpayers and their tax advisors/preparers. For some reason, this industry is almost hopelessly re-active. Most clients and preparers don’t even look at the fact patterns until after the first of the year, when nearly all potential strategies are impotent, except the old “well, you could put some more into your IRA.”
The reason this is so important is the tax “game” has four quarters and they all end on December 31st. After that, the score is mostly set in stone; it just is not visible until your prepared does the tax accounting.
In order to win the tax game, you need to play the game before it is over. Unlike the vast majority who don’t “plan” until after the end of the tax year, the smartest taxpayers and best tax advisors begin before the tax year begins, or at worst by summer of the tax year. Much later than that, and even the best tax mind is a Monday morning quarterback.

Tax Mistake #7—No Strategy or Ignoring Tax Efficient Investing Strategies
This is without question the most fundamental mistake made by taxpayers and their tax advisors/preparers. For some reason, this industry is almost hopelessly re-active. Most clients and preparers don’t even look at the fact patterns until after the first of the year, when nearly all potential strategies are impotent, except the old “well, you could put some more into your IRA.”
The reason this is so important is the tax “game” has four quarters and they all end on December 31st. After that, the score is mostly set in stone; it just is not visible until your preparer does the tax accounting.
In order to win the tax game, you need to play the game before it is over. Unlike the vast majority who don’t “plan” until after the end of the tax year, the smartest taxpayers and best tax advisors begin before the tax year begins, or at worst by summer of the tax year. Start planning much later than that, and even the best tax mind is a Monday morning quarterback.
As you accumulate wealth, taxes on investment returns become more and more important. Mutual funds with a lot of turnover are particularly tax inefficient since taxpayers are forced to pay tax on any gains or income the fund recognizes during the tax year, regardless of whether or not the investor themselves takes any income or recognized any gain. This has been widely viewed as unfair since implemented the late 1980s as part of tax reform, but widely ignored by taxpayers for decades, to their povertycausing many to overpay. ETFs and single stocks are much more efficient in this regard. Deferred annuities are some of the most highly taxed products around—with really vicious LIFO and ordinary income tax treatment—but widely sold and swallowed as being tax shelters! Bond and CD income gets taxed at your highest bracket, but dividend income from stock sources enjoys a lower capital gains-type rate. Making stock changes at high market levels needlessly can exacerbate capital gains, and too many people still don’t do tax loss harvesting each year, which can save tens of thousands or more. All of the preceding has to do with non-qualified (non-IRA-like money), but there are lots of smart strategies for IRAs beyond the arbitrage discussed above. For instance, it is smart to put ordinary income rate (top marginal rate) assets like bonds in IRAs, but and capital gains rate assets outside where they will enjoy the lower rate. Otherwise, in the worst cases, you can effectively pay about double the available tax rate! Worse yet, if the capital gains asset is one you might pass on at death, you may wind up paying the highest marginal rate instead of zero tax by way of the at death basis step up!

Tax Mistake #8—Not Planning an Estate Freeze
If your estate is likely to grow to taxable levels (right now over about $5.5M for individuals, including everything you own, which includes life insurance death benefits, but not so long ago it was only $600K, and with the fiscal situation, there’s no telling if it will stay as high as it is), everything over the exemption amount could be taxed at rates that start at 18% and got to 40% fast. An estate freeze caps the taxable value at current levels, limiting or eliminating tax. There are a lot of ways to do this, some much better than others, but many exposed taxpayers are never advised to prevent what could be a huge problem while there is still time. This oversight exists at all wealth levels. For instance, James Gandolfini (Tony from The Sopranos) left a $70M estate, and needlessly paid some $44M in estate taxes . . . and he had some elaborate (but maybe not so good) estate planning in place.

Tax Mistake #9—Not Using Tax-Free Vehicles, Like 529s and (Especially) ROTHS
Even for those who have develop advanced strategies to sharply reduce taxes from professional or business income and developed estate plans that allow significant wealth to pass tax free from generation to generation, basic tools like 529s and ROTHS can be extremely powerful. Though each has restrictions on free access, when used in accordance with the rules (which are actually pretty livable), their tax-free nature can really supercharge your wealth creation. To use a simple example, let’s say we invest $100,000 for 20 years at 10% net return. We will assume a blended tax rate of 30%, which is about halfway between the top income and long-term capital gains rates. In simple terms, a tax-free investment compounds at the full 10%, but the taxable one would only compound at 7% (10%-30% tax). In 20 years, the tax-free account is worth $672K, the taxable one is worth $386K (only about half a much). This is a super example of the power of tax control in building wealth. The difference in results is huge, but can be completely obscured unless you actually crunch the numbers!